Moody’s trims Service King

Moody’s Investors Service said it downgraded Midas Intermediate Holdco II, LLC’s (Service King) corporate family rating and probability of default rating to Caa1 and Caa1-PD, respectively. Concurrently, Moody’s downgraded the rating on the company’s senior secured bank credit facility to B2 from B1 and affirmed the Caa2 rating on the senior unsecured notes. The outlook remains negative.

"Today’s downgrade and negative outlook reflect the increased refinancing risk related to the August 2021 maturity of the company’s term loan as the company’s leverage remains very high," said Charlie O’Shea, a Moody’s vice president in a press release.

"The action also reflects the heightened risk that the company will incur much higher cash interest costs as part of a refinancing transaction such that it meaningfully constrains its future investment capacity and free cash flow generation long-term," continued O’Shea. "Moody’s continues with its favorable view of the fundamentals for the collision repair sector and believes that management has a strategy that can, if well-executed, reverse weak operating trends."

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